Which of the following is correct with respect to retained earnings?
A) Retained earnings represent debt financing.
B) Retained earnings equal the profits that have been paid out as dividends.
C) Using retained earnings means that the firm will have to borrow money and pay interest on loans or bonds.
D) The smaller dividends that may be paid to shareholders as a result of retaining earnings may decrease the demand for, and thus the price of, the company's stock.
E) None of these are correct.
Correct Answer:
Verified
Q7: What is a stock's market value?
A) The
Q80: Which of the following represents a stock's
Q81: From an investor's perspective, which of the
Q82: Equity financing via common stock can be
Q83: Don Dillon is a 24-year-old graphic designer.
Q84: If Sunshine Tanning's founders invested $10 000
Q86: The most conservative investments are government savings
Q87: Len is working with a discount broker.
Q89: Tim wants to invest in stocks and
Q90: What are the two variables that are
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents